The legal woes of Solana-based meme coin generator Pump.fun have heightened as the project now faces a second-class action within a month.
On January 30, Diego Aguilar, an alleged Pump.fun investor, filed a lawsuit against the project in a New York federal court. Aguilar alleged that all meme coins created on the platform are unregistered securities.
Complaint Against Pump.fun
According to the plaintiff, Pump.fun generated at least $500 million in fees from creating these ‘highly volatile’ meme coins. The complaint identified Baton Corporation, a company based in the U.K., as the creator of Pump.fun.
Notably, it also named three other individuals as co-founders, such as Noah Tweedale (CEO), Alon Cohen (COO), and Dylan Kerler (CTO).
Aguilar accused Pump.fun and its creators of working with social media influencers to create and market tokens deemed as securities. The plaintiff disclosed that he lost significant funds by investing in three meme-based tokens created on Pump.fun such as FRED, FWOG, and GRIFFAIN.
Despite acknowledging that Pump.fun did not create these tokens, the plaintiff contended that the platform provided the issuers with automated tools, enabling anyone to create and sell worthless tokens within minutes.
Based on this, the complaint referred to Pump.fun as a joint issuer of all the tokens launched on its platform.
Notably, the suit seeks rescission of all tokens purchased through Pump.fun, attorney’s fees, and monetary damages for investors. New York-based law firm Wolf Popper LLP filed the lawsuit on behalf of Aguilar.
Previous Suit Against Pump.fun
It bears mentioning that this law firm had collaborated with Burwick Law to sue Pump.fun earlier this month. In that suit, Kendall Carnahan, who stood as the lead plaintiff, accused Pump.fun of exploiting users. Moreover, Carnahan alleged that the platform was instrumental in promoting inappropriate content relating to sexual and child abuse.
Furthermore, the suit claimed that Pump.fun violated federal securities laws by facilitating the sale of PNUT, which it labeled a security.
Despite its legal woes, Pump.fun has continued to witness increased user activity. Data from Dune Analytics show that Pump.fun’s weekly trading volume reached an all-time high (ATH) of $3.3 billion.
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